Should I Use An Online Property Management Service Instead of a Property Manager?

Online property management tools have increased in number in recent years. These systems generally offer low monthly fees in return for largely automated and online service.

Generally, the way these online property management services work is that a very low management fee is taken and the online platform is used to manage the processes which can be automated. The platform forwards any rental enquiries and applications on to you as the landlord, will collect and deposit rent into your account, and will follow up on any unpaid rent.

In reality, these are the easiest aspects of property management and require little skill or knowledge to complete.

If I sign up to an online property management service, what do I still have to do myself?

A lot! At first glance it appears that an online DIY property management system is a great way to go. However, following are a list of all the aspects the landlord still needs to complete independently and/or at additional cost, using online platform as the example provider:

Photography

You are responsible for arranging or providing high quality photography to accompany your rental listing

Copywriting

The description of the property to lure in the greatest number of quality tenants is left up to you

Determining optimum rent

An online system will not be able to accurately determine the best rental return to expect i.e. where to set your rent. They will provide an automated market report with no physical inspection of the property.

Signage

To arrange a For Lease sign at the front of your property is an additional cost

Advertising

Listing your property for rent on realestate.com.au and other websites is an additional cost

Condition reports

You are responsible for completing these yourself. This is a minefield of potential risk should it become your word against the tenant's and a case needs to go to Tribunal, where correct documentation and legal process is essential. It should be noted that Cubbi currently say they can complete a condition report for you for "$150+"

Inspections

Similarly, you are responsible for completing the regular inspections of your own property

Enquiries and applications

You are responsible for reviewing and responding to all rental enquiries and applications

Managing open houses

You are responsible for showing people through your own open https://www.forestcitypropertymanagement.ca/ house. Cubbi claim they can do this for a fee, however this is currently an additional cost of $190 for two inspections per week, run at a time which suits them and limited to suburbs of Melbourne only

Running tenant background checks

You are responsible for completing all prospective tenant reference checks yourself. Cubbi does enable you to run a tenancy blacklisting check against the National Tenancy Database for a fee, however you need to be an agent in order to do this. Alternatively, most agents and property managers including ourselves will run a NTD blacklist check for you and screen out undesirable applicants

Maintenance

While maintenance requests may be logged via the online platform, you will still be required to confirm details with the tenant and arrange tradespeople as required to complete the maintenance

Tribunal preparation and attendance

Should you need to take a problem tenant or issue to the NSW Civil and Administrative Tribunal (NCAT), you are responsible for all preparations and appearances

So, why do people choose to manage property themselves?

There are three primary reasons people choose to manage property themselves rather than using a property manager.

Cost

There is a misperception that property management fees are not worth what you get in return.

As a property manager's fees are fully tax-deductible, it seems many landlords simply don't understand the depth of what is involved when they choose to save a few % in management fees in return for opting in for a whole lot of work and risk.

Negative past experiences

Landlords often cite negative experiences with real estate agencies as a reason to manage their property themselves. Poor communication from an agency is one of the most common reasons for a landlord leaving an agency arrangement.

Property management is easy (ha!)

There is an incorrect assumption of property management being easy. This may be the case when everything is going right - you have great tenants paying on time, in a property which requires little maintenance, and you're nearby to help if anything needs to be looked at.

But it's when the unexpected happens and things aren't going as smoothly that you will find the experience of a property manager invaluable. Their familiarity with the legislation, how to negotiate with difficult parties, how to prepare for and succeed at a tribunal hearing... all of these things only seem critical when the run of good times ends and this expertise is needed.